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September 24, 2009

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The Senate Finance Committee voted down an amendment by Democratic Sen. Bill Nelson that threatened to undo an $80 billion deal among the White House, Finance Committee and PhRMA. The amendment failed 10-13 with Democratic Sens. Baucus, Menendez and Carper voting with Republicans to kill the amendment.

The vote was the first major test of a deal drug makers struck with the White House and Senate Finance Chairman Max Baucus to contribute $80 billion to help pay for reform. And committee members were worked hard by White House officials and pharmaceutical lobbyists to oppose the amendment.

“It would have undermined our ability to move this bill through committee and onto the floor and through the Senate,” Carper continued. “(It would have been) saying to the pharmaceutical industry: after you are the first at the table, you negotiated an agreement in good faith with the administration, with the leadership of this committee, and now we are going to double your contribution that you have agreed to, even though you are out there spending money to promote the adoption of comprehensive health care reform. They are not foolish in the pharmaceutical industry.”

Nelson also heard from several White House officials.

"They had an agreement and they would prefer to keep that agreement," Nelson said of the message from the White House. "And they understand I just disagreed with that."

Nelson said his amendment would generate $106 billion in revenue, enough to close the so-called donut hole, a gap in drug coverage Medicare beneficaries face, and provide $50 billion in extra savings that could be used to bring down the cost of the bill, he said. The amendment would have achieved the savings by essentially requiring drug makers to give the government rebates on the drugs they sell to patients in the Medicare and Medicaid programs.

“I’m not here picking on PhRMA but I just think philosophically Medicare patients shouldn’t be paying more than Medicaid beneficiaries," Nelson said.

But Baucus defended the deal he made with the drug companies, who agreed to contibute $50 billion to help close the donut hole.

“I want to close the donut hole just as much anybody here, but I think the way it’s being closed here is inappropriate. And we have to find some other time, some other way to close the donut hole. And I frankly wish the senator had not pushed this amendment because it’s not going to pass,” said Baucus, foreshadowing the proposal’s defeat.

Drug makers fought Nelson's amendment hard, reminding senators that imposing rebates broke the terms of their deal. They also argued that Nelson’s amendment was similar to a House amendment sponsored by Rep. Henry Waxman, which CBO said would decrease drug prices, but increase seniors’ premiums. Nelson disputed that his amendment would raise premiums.